The demand for copper is growing. In the next 20 years alone, an increase of up to 50 percent is expected, and this growth is part of a broader trend. As the World Bank’s 2017 report titled “The Growing Role of Minerals and Metals for a Low-Carbon Future” shows, demand for metals, including copper, could rise tenfold by 2050 if the world moves towards a low-carbon energy future.
Several long-term trends are driving copper demand growth and are expected to do so over the coming decades. These trends include increased consumption of electronics, the proliferation of electric vehicles, the increased use of renewable energy sources and energy efficiency—all of which require significant amounts of copper in order to function.
Is there enough copper to meet this growing demand? Currently, global copper reserves are estimated at 830 million tonnes (US Geological Survey [USGS], 2019) and annual copper demand is 28 million tonnes. According to USGS data, since 1950 an average of 40 years of copper deposits and over 200 years of resources have been available, including reserves, discovered and potentially profitable deposits, and undiscovered deposits predicted based on preliminary geological surveys. These copper resources total 5,000 million tonnes (USGS, 2014 & 2017). In addition to the known deposits, it should be mentioned that 35 percent of the demand is covered by recycled copper, which significantly reduces the need for mined copper.
The data is clear. There is enough copper to meet current and future demand—also taking into account expected demand for copper in the coming years. This shows that copper will enable more renewable energy and electric vehicles. However, to meet this demand, copper must be used intelligently and efficiently. To ensure this, industrial investment and political security and stability are required.
The copper industry is already investing heavily in innovation and sustainable solutions. On average, members of the Copper Alliance® invest $20 billion per year to enhance their contribution to sustainable development in areas such as protecting the environment and ensuring the safety of their operations. However, this alone is not enough. Although industry can and should do more to ensure that copper is recovered, used and recycled in a sustainable manner, there must also be political stability and a favourable regulatory environment for such investment.
Copper is found in more than 20 countries around the world. According to the International Copper Study Group (ICSG) in 2017, the world’s largest producers are Chile, Peru, China and the USA. The extraction of copper is therefore not dependent on a specific country or region, as is the case with other commodities. This diversity leads to more stability in the copper market and lowers the copper risk profile.
However, the stability of copper production in different regions must be reconciled with political security and stable permit conditions if copper is to be efficiently and sustainably extracted and processed. Issues such as the approval of processes, which are often slow to expand to meet growing copper demand for existing mines, could be better streamlined and benefit from increased political security.
Political security and a stable licensing framework also ensure that environmental standards and community engagement are implemented and maintained by industry.
Recycling and the circular economy must be taken into account when discussing the coverage of future copper demand. Copper is currently being recycled to a considerable extent. ICSG estimates that on average 35 percent of the world’s copper consumption comes from recycled copper. Copper is inherently a circular material because it has no loss of quality when reused for another function. Recycling more copper will not only help meet demand, but also make the industry more sustainable and conserve the planet’s natural resources.
Despite already substantial recycling rates, the copper industry can go even further. There is still untapped potential for the industry to recycle. This is an economic opportunity that the industry needs to take to maintain its own operations while creating a more sustainable economy in the long term.
While the significant recycling rate and the potential of the copper industry for even more recycling are impressive, recycling alone will not be enough to meet demand and ensure a stable supply of copper. Further mining of new copper will be required. The solution to sustainably meet growing demand is a combination of both, an efficient and sustainable mining framework with adequate environmental standards and high recycling rates to make the most of the copper currently on the market.
Although demand continues to grow due to consumer and industry trends, the stable supply of copper will continue. However, how these copper reserves are used and promoted depends on other factors. In order to sustain this stable supply in an efficient and sustainable manner, there must be investment from industry and the political stability needed to make those investments. This does not mean that higher recycling rates and a circular economy are not required. Both components are critical to the long-term stability and sustainability of the industry, and we need to holistically address these issues to ensure a viable and responsible copper industry for many years to come.